Canabrava Diamond Corporation and Paramount Ventures and Finance Inc.: Additional Kimberlitic Boulders Discovered on Ontario J.V.

Business Editors

VANCOUVER, B.C.--(BUSINESS WIRE)--Aug. 21, 2001

Canabrava Diamond Corporation (CDNX:CNB.) and Paramount Ventures and Finance Inc. (CDNX:PVF.) are pleased to report that excellent progress has been made with the summer exploration program on their Ontario Joint Venture.

As reported in the joint press release of July 25, 2001, the Option Agreement with Kennecott on the Ontario Joint Venture has been amended effective July 1, 2001 and Canabrava is now the Project Operator.

Canabrava field teams were mobilized in late June and commenced an aggressive program from two field bases on July 1. As a first priority, prospecting teams focused on locating the source of two diamond-bearing kimberlite boulders identified by Kennecott in early 2001. Six diamonds were recovered from one boulder (including 2 macrodiamonds) and one diamond was recovered from the second boulder. Within the first few days of the program, Canabrava field geologists discovered additional kimberlitic boulders within the vicinity of the original discovery and rapidly defined a boulder train extending for eight kilometers. The train leads to an outcrop of kimberlitic rock that is similar in appearance to the diamond bearing kimberlite boulders. Exposure is poor and further work is being carried out to define the extent and nature of the body. A 120-kilogram sample has been excavated from the outcrop and representative material submitted for petrological evaluation and microdiamond analysis.

The prospecting program is ongoing and in addition to the above, a variety of kimberlitic boulder occurrences have been discovered within eight other areas of the project. Some of these boulders are large in size (up to 2 x 2.5 metres) and angular in form, which suggests a nearby source. The boulder trains correlate with a series of kimberlite indicator mineral plumes previously discovered by Canabrava and refined by Kennecott over the past two years. The presence of highly sub-calcic G10 garnets and favorable chromite and chrome diopside compositions within these plumes provides compelling evidence for the presence of diamondiferous kimberlite in the region.

Based on the discovery of the additional kimberlitic boulders, a further 704 claim units have been staked and option agreements with a number of individual claim holders are being finalized. In view of the success of the program to date, systematic prospecting will continue throughout the summer and into the fall field season.

A full review of all sampling and indicator mineral chemistry results on the Project to date has been completed and multi-layered geological maps have been compiled. The resultant integrated material has been used to define the best areas to undertake airborne geophysical surveys. A first phase high-resolution airborne geophysical survey covering 5,366 line kilometers has commenced, and is expected to be completed within 10 days. Immediately after the flying is completed, field crews will initiate ground follow-up on targets identified from the survey followed by drill testing of the best targets as soon as possible.

Canabrava Diamond Corporation is actively exploring for diamonds in Brazil and Canada both independently and through major joint ventures with Kennecott Canada Exploration Inc., Navigator Exploration Corp., and Paramount Ventures and Finance Inc. The Company is 45.6% owned by Southwestern Resources Corp. (SWG-T).

Paramount Ventures and Finance Inc. is an exploration company with diamond projects located in Brazil and Canada.

The Canadian Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.